Severo Mutegeki & Another vs Mamlaka Ya Maji Safi Na Usafi Wa Mazingira Mjini Dodoma (Civil Appeal No. 343 of 2019) [2020] TZCA 310 (19 June 2020)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA ( CORAM: MUGASHA. J.A.. NDIKA. 3.A. And LEVIRA, J.A.^ CIVIL APPEAL NO. 343 OF 2019 SEVERO MUTEGEKI.........................................................1st APPELLANT REHEMA MWASANDUBE..................................................2n d APPELLANT VERSUS MAMLAKA YA MAJI SAFI NA USAFI WA MAZINGIRA MJINI DODOMA (DUWASA)........................RESPONDENT (Appeal from the decision of the High Court of Tanzania at Dodoma) (Mansoor, J.’l dated the 21st day of September, 2018 in Labour Revision No. 06 of 2017 JUDGMENT OF THE COURT 16th & 19th June, 2020 MUGASHA. J.A.: The appellants in this case were employees of the respondent as cashier and assistant accountant respectively. On the 1st February, 2016 the respondent wrote a letter to each appellant notifying them on having occasioned loss of TZS. 250,560,517 and TZS. 380,478,754 respectively, as unveiled in the internal audit report. In the said letters, each was required to make a written response to the said allegations i

and they both obliged. Subsequently, they were interdicted in order to pave way for an investigation to be conducted. Later, the appellants after being heard before the respondent's disciplinary committee, were found guilty of negligence and given a warning. However, they were directed to resume their duties. On 29/2/2016 the appellants were for the second time interdicted from employment to pave way for another investigation to be conducted which is the subject of the present appeal. Subsequently, on the 9th and 18th day of March, 2016 the respondent wrote to each appellant directing them to avail explanation on the loss of TZS. 408,851,939/=. They both obliged and on the 21st March, 2016 were summoned before the respondent's disciplinary committee on account of allegations of occasioning loss of TZS. 408,851,939/=. After the hearing, the appellants were found guilty of gross negligence and dishonesty and as a result, they were both terminated from employment from the 2n d day of April, 2016. The appellants were not amused by the expulsion and as such, they lodged an appeal to the Commission for Mediation and Arbitration (the CMA) for Dodoma vide RF/CMA/DQD/46/2016 and

RF/CMA/DOD/47/2016 respectively. The CMA reversed the decision of the respondent's disciplinary committee on the ground that, the appellants were unfairly terminated from employment because there were no justifiable reasons and that procedures for termination were unjustifiable. Aggrieved with the decision of the CMA, the respondent successfully lodged a Labour Revision No. 6 of 2017 in the High Court of Tanzania at Dodoma whereby the decision of the CMA was quashed and set aside. Apart from the High Court observing that the CMA award in favour of the appellants was illegally procured, it concluded that the termination was justified because the respective procedures were complied with. Being aggrieved with the decision of the High Court, the appellants have preferred the present appeal to this Court. In the Memorandum of Appeal, they fronted seven grounds of complaint as follows:

1. That the High Court erred in law and fact in deciding that there was illegal and improper procurement of the award at the Commission for Mediation and Arbitration.

2. That the High Court erred in law and fact in deciding that, there was proof of loss of Tshs. 408,852,939/= caused by the appellants' gross negligence.

3. That the High Court erred in law and fact in deciding that, there was gross negligence committed by the appellants and that there were justifiable reasons for their termination.

4. That the High Court misdirected in deciding that the appellants were warned for the first time and then the loss continued as such it justified for their termination.

5. That the High Court erred in law and fact in deciding that the supply of the extract of the audit report was enough for the appellants' right to be heard.

6. That the High Court erred in law and fact in deciding that the respondent followed lawful procedures in termination of the appellant's employment.

7. That the High Court erred in law and fact in not upholding the decision of the Commission for Mediation and Arbitration for

Dodoma in its findings and award since it was based on thorough analysis and valuation of the evidence. Parties filed written submissions containing arguments for and against the appeal which were adopted by the respective learned counsel at the hearing of the appeal. At the hearing, the appellants were represented by Mr. Elias Machibya and Ms. Magreth Mbasa, learned counsel, whereas the respondent had the services of Mr. Abubakar Mrisha, learned Senior State Attorney and Mr. Daniel Nyakiha, learned State Attorney. Upon being reminded on the dictates of section 57 of the Labour Institutions Act No. 7 of 2004 which require parties appealing to the Court to do so on a point of law, Mr. Machibya opted to abandon the 2n d , 3rd, 4th and 7th grounds of appeal. In the 1st, 5th and 6th grounds of appeal, the appellants basically faulted the learned High Court Judge in ruling that, the award in their favour by the CMA was illegal and improperly procured and that the termination of the employment of the appellants was lawful. It was submitted that, the learned High Court Judge made determination on extraneous matters which were raised suo motu in

the course of writing her judgment and without hearing the appellants which made her to conclude that the CMA award was illegal and improperly procured. On this, it was argued that, though the issues of improper procurement of the arbitration award; gross negligence of the appellants and embezzlement of funds were not pleaded, they were the basis of the learned Judge's determination who for that reason, condemned the appellants without hearing them. He argued this to be contrary to paragraph 13 (6) of the Employment and Labour Relations (Code of Good Practice) Rules, G.N 42 of 16/2/2007 (The Code of Good Practice) and urged the Court to nullify the decision of the High Court and return the case file to the High Court for the proper hearing of the Revision. Regarding the unfair termination, it was submitted that, the learned High Court Judge did not consider that the appellants were terminated in violation of the prescribed procedure. It was pointed out that, while the audit report is what precipitated the termination of the employment of the appellants, after the audit in question, the appellants were not given opportunity to discuss the audit findings with the internal auditor before he made a report which was the basis of preferring the charges against the appellants. He argued this to 6

have contravened Dodoma Urban Water Supply and Sewerage Authority (DUWASA) Internal Audit Manual (the Internal Audit Manual). In addition, it was contended that, though the appellants had requested to be given the audit report before the hearing, this was not heeded by the respondent. In this regard, it was argued that the appellants were condemned without being given opportunity to be heard which is a violation of Rule 13 of the Code of Good Practice. On the other hand, in opposition of the appeal, Mr. Mrisha urged the Court to dismiss the appeal. It was submitted that, the High Court s observation on the illegal and improper procurement of the CMA award, was justified as it suffered material irregularities on account of the failure by the arbitrator to properly evaluate the evidence presented before the CMA on the occurrence of loss occasioned by the appellants which was not considered by the arbitrator. Moreover, it was submitted that the termination was fair and valid because the procedures were complied with to the letter. On this, Mr. Mrisha pointed out that, the appellants were duly notified about the allegations against them; were given opportunity to make responses; informed about right to be represented before the

disciplinary committee and opted to bring their advocates; upon being heard they were found guilty and terminated from employment on account of gross negligence occasioning loss of TZS. 408.851,938.65/=. It was argued that, since the internal auditor had conducted a special audit, he was bound by special terms of reference and not the Internal Audit Manual and as such, he was not obliged to discuss the findings with the appellants before making the audit report. In the alternative, it was argued that, since the appellants were given extracts of the audit reports, it was perilous on their part not to press to be availed with the full audit report. In addition, Mr. Nyakiha chipped in by arguing that, the auditee referred to under item 8.4 of the Internal Audit Manual is the Director General who was being audited and not the appellants. Finally, it was submitted that the termination was fair and valid having complied with the criterion stated under Rule 13 of the Code of Good Practice. In rejoinder, Mr. Machibya maintained that, the appellants were not heard in what was raised suo motu by the learned High Court Judge on the illegal and improper procurement of the award. He added 8

that, since it is the Director General of the respondent who directed the audit to be conducted as reflected at page 100 of the record of appeal, the actual auditees were the appellants and not the Director General. He thus reiterated that, the appellants were entitled to be given opportunity to discuss the findings with the auditor before the making of the report. Besides, he added that despite requesting to be availed with the full audit report as indicated at pages 877 and 879 of the record which was conceded by the Auditor at page 1593 of the record of appeal, the report was not availed to the appellants. He argued this to be a violation of Rule 13 (5) of the Code of Good Practice and urged the Court to allow the appeal. After a careful consideration of the written submissions for and against the appeal and the oral submissions of learned counsel, we have gathered that, it is not in dispute that the employment of the appellants was terminated on account of having occasioned loss of the sum of TZS 408,851,939/= to the respondent. However, parties locked horns on the propriety or otherwise of the finding by the High Court on the award by the CMA being illegally and improperly procured and secondly, the validity or otherwise of the termination of the appellants' employment.

Rule 8(1) (c) and (d) of the Code of Good Practice provides that: "An em ployer m ay term inate the employment o f an em ployee if he- (c) follow s a fa ir procedure before term inating the contact: and (d) has a fa ir reason to do so as defined in Section 37(2) o f the Act . " In terms of the provisions of section 37 (2) of the Employment and Labour Relations Act, termination is adjudged unfair if the employer fails to prove that: One, the validity of reasons for termination; two, that the reason for termination is fair and three, that the termination was conducted in accordance with a fair procedure. What constitutes a fair termination is regulated by Regulation 13 of the Code of Good Practice which prescribes the criteria and the procedure regulating lawful termination to include the following: "13-(1) The em ployer shall conduct an investigation to ascertain whether there are grounds fo r a hearing to be held.

(2) where a hearing is to be held, the em ployer sh a ll notify the employee o f the allegations using a form and language that the employee can reasonably understand. (3) The employee shall be entitled to a reasonable tim e to prepare for the hearing and to be assisted in the hearing by a trade union representative o f fellow employee. What constitutes a reasonable tim e sh all depend on the circum stances and the com plexity o f the case, but it sh all not norm ally be less than 48 hours. (5) Evidence in support o f the allegations against the em ployee sh all be presented a t the hearing. The employees sh all be given a In terms of sub-regulation (1) what entails an investigation to ascertain whether there are grounds of the hearing includes as well, exhausting the prescribed internal measures in the Employment Institution regulating the operational aspects which are binding on li

both the employees and the employer. In the present case, as earlier stated, what triggered the dispute which is the subject of the appeal before us, is the internal audit in terms of letters authored by one Selemani Mwaita, Accountant addressed to each of the appellant. In respect of the 1st appellant, the letter with REF: DUWASA/CF.SD20/3/VOL.I/ 45 dated 9/3/2016 at pages 838 indicates among other things, as follows: YAH: KUTOA MAELEZO KUHUSIANA NA UPOTEVU WA FEDHA KIASI CHA TSHS. 408,851,939/ = " Mnamo tarehe 14.01.2016 m w ajiri aiipokea taarifa ya Mkaguzi wa ndani ikiw a na taarifa m biii moja ikiw a n i upotevu wa fedha kiasi kilichotajw a hapo juu. Katika taarifa hiyo inaonesha kuwa wewe kama M tu n za Fedha (C a sh ie r) kwa kipindi cha kati ya tarehe 01.07.2015 hadi 26.11.2015 haukuweza kupeieka fedha benki kiasi tajwa hap ju u zikiw a n i fedha tasiim u kutoka kwa wateja w aiioiipia kupitia pay points za Mam/aka kwa kipindi tajwa. Kwa m ujibu wa majukumu yako ya kazi kama Mtunza Fedha (cashier) uiipokea fedha 12

hizo kutoka kwa Revenue collectors kwa tarehe tofauti kama viam batisho vinavyoonesha lakin i kutokana na sababu ambazo hazifaham iki haukuweza kupeleka fedha benki kama unavyopaswa kufanya pasipo maelezo yoyote kitendo ambacho kim epelekea upotevu wa fedha kiasi hicho.... Kwa barua h ii nakupa masaa 48 tokea muda wa kupokea barua h ii utoe m aelezo ya kina n i wapi fedha hizo zilipo, na kama hakuna m ajibu je kwa nin i usichukuliwa hatua ka li za kinidham u kwa upotevu huo. Kwa barua h ii naambatisha vielelezo vinavyoonesha mchanganuo wa kiasi kilichopokelewa kwa siku na kiasi kilichopelekw a benki pamoja na tofauti ambavyo ndiyo kiasi kilichopotea." In respect of the 2n d appellant, the respective letter is REF: DUWASA/CF.SD.20/3/VOL.I/ 52 dated 18/3/2016 whereby at page 1497 itbears the same contents as that of the 1st appellant except on the allegation of negligent making entries in thecash book. In a nutshell, in reference to the audit report in question, each appellant was required to explain away as to why he should not be 13

subjected to disciplinary measures on account of omitting to discharge duties which occasioned the stated loss to the respondent. The appellants obliged and gave their explanations. In those explanations, in 1st appellant's letter which appears from pages 874 to 877 of the record, she among other things, inquired from the respondent what is reflected at page 877 that: 7. Vielelezo vyote ulivyoam batanisha kwenye barua yako niiikw isha vijibu kwenye hatua za nidhamu za awali. Hivyo hatua h ii Uiyoanza upya n i batiH na yenye nia mbaya kwangu. Hata hivyor vielelezo hivyo havielew eki kw ani vingine vimeandikwa kwa kiingereza, vingine vinaonesha m ajedwali amabayo siyo rah isi kuyachambua na kuyaelewa. W akati mwingine kama kuna shtaka h alali na la haki n i vem a m tu akapew a re p o rt yo te n zim a ya u k a g u zi Hi aweze kujibu vizuri. M im i sikupewa hiyo taarifa. Badaia yake kwenye barua yako umeambatanisha vipande tu ambavyo unavihitaji wewe bila kuona taarifa yote. Vipande vya kuonyesha wazi wapi m kaguzi alisem a m im i nim ekosea...." 14

As for 2n d appellant, her letter dated 20/3/2016 from page 878 to 880 of the record in paragraph 5 at page 879 of the record raised a similar concern as follows: "... Vielelezo vyako vyote ulivyoam batanisha vinaonyesha tu mchanganuo wa kiasi kilichopelekwa benki pamoja na tofauti ambayo ndiyo kiasi kiiichopotea. Vielelezo h ivi havinihusu kutokana na mapungufu yafuatayo: (i) Havionyeshi m im i kosa langu n i tip i na ni/ihusika wapi? (ii)Taarifa yenyewe ya m kaguzi sikupewa yote Hi nam i niweze kueiewa mapungufu yangu yaiitokea vipi na hapo ndipo ningeweza kujibu vizuri. (iii) Hizo taarifa za mahesabu (cash book) zinazodaiwa niliiingiza mahesabu kim akosa sijapewa iii niweze kujibu mapungufu yangu. (iv) Majedwa/i yote uiiyoniam batanishia yanaonyesha fedha ziiizoingia na zilizopelekw a benki na mapungufu. M im i kazi yangu siyo kupokea pesa waia kuzipeieka benki. Hivyo vielelezo hivyo havihusiki na mimi. Ningeomba nipewe vielelezo vinavyohusiana na kazi yangu Hi niweze kujibu malalam iko yanayonihusu...." 15

Both appellants brought to the attention of the respondent that, without the full audit report they were not placed in a position to know the raised queries and that, the extracts of the report availed were not clear; neither relevant to the charges nor had any bearing on the scheduled duties of one of the appellant. As such, it was not possible for them to make adequate explanations on the charges laid. However, this was not heeded and instead, the appellants were subjected to a disciplinary committee and they were expelled from the employment. Before the CMA, a similar complaint ensued that neither were the appellants involved in the audit exercise nor given the audit report so as to make proper responses to allegations against them. The CMA's determination was to the effect that the appellants were not fairly terminated on account of what is reflected at page 1685: " Tume inaona kuwa hoja h ii ina mashiko kwa sababu ya kutowahoji w alalam ikaji wakati wa ukaguzi Hikuwa n i sawa na kuwanyima haki ya kusikilizw a. H ii pia Hikuwa n i kwenda kinyume na kanuni za ukaguzi wa ndani za DUWASA. (Internal A udit Manual)...."

The decision was reversed by the High Court on ground that the award was illegal and improperly procured because the appellants were guilty of gross negligence. Besides, the appellants' complaint on not being availed with the audit report was treated by the High Court in the following manner: "In fact there was ille g a l and im proper procurem ent o f the Award in that there was am ple evidence o f gross negligence present before the Arbitrator, and it was wrong fo r the Arbitrator to rely in his decision that since the em ployees were not supplied with fu ll report o f the audit then they were denied a chance to be heard. I t is in evid en ce th a t th e em ployees w ere su p p lie d w ith th e e x tra c t o f th e a u d it re p o rt in w hich th e ir ch arg e w as based, a n d if th e y n eed ed m ore in fo rm a tio n o r m ore p a rtic u la rs o f th e ch arg e, th e y sh o u ld have re q u e ste d from th e e m p lo ye r b e fo re th e y a n sw ere d th e le tte r to sh o w cause. It is in evidence that the em ployer was able to prove that the em ployees were negligent." [Emphasis added] 17

This finding is with respect, wanting and it is entirely not supported by the evidence on the record which justifies the intervention of the Court on account of misapprehension of the evidence on the record as it constitutes a point of law for determination by the Court in terms of section 57 of the Labour Institutions Act. We say so because, it is on record that, the request by the appellants to be availed with the full audit report and other documents so that they could make prompt responses was not heeded by the respondent who proceeded to punish the appellants. Moreover, while the CMA considered paragraphs 8.4 and 8.4.1 of the Audit Manual which, among other things, prescribes the modality of discussion of internal audit report with the management and that no findings, conclusions and recommendations should ever be incorporated in an audit report that were not previously discussed with auditees, the High Court did not consider the Manual which was crucial in determining if the appellants were involved or not. It was the submission of Mr. Nyakiha for the respondent that, the auditee in this matter was the Director General and not the appellants and as such, the internal auditor was not obliged to have a 18

prior discussion with the appellants. This was challenged by Mr. Machibya who argued that, since it is the Director General who directed the audit to be conducted, the actual auditees were the appellants and not the Director General of the respondent. It is our considered view that, though the Internal Auditor's ultimate reporting responsibility lies to the Director General it is not in dispute that, those actually audited were the appellants and it is the audit report which triggered the charges against them. In that regard, the non-involvement of the appellants and subsequent conviction based on that report was irregular because they could not adequately prepare for the hearing before the disciplinary committee of the respondent. Instead, it is the respondent who being in possession of the report had all the ammunition to make a stronger case which was to the disadvantage of the appellants which rendered what followed to be unprocedural. We are fortified in that account in the light of what the High Court said in case of sim eon m anyaki v s th e in s t it u t e o f FINANCE MANAGEMENT [1984] TLR 304 among other things, that: (i) An adm inistrative body exercising functions that im pinge directly on legally recognized interests 19

has a duty to act ju d icia lly in accordance with the rules o f naturaljustice ; (ii) the applicant whose rights and legitim ate expectations stood to be so adversely affected by the inquiry had the right: a. o f being sufficiently appraised o f the particulars o f the prejudicial allegations that were to be made or had been made against him, so that he could effectively prepare his answer and collect evidence necessary to rebut the case against him; b. subject to the need for withholding details in order to protect other overriding interest, o f being accorded sufficient opportunity o f controverting or commenting on the m aterials that had been tendered or were to be tendered against him; c. o f presenting his own case; d. o f being given a reasonable and fa ir deal..." We fully subscribe to the said decision and in the case at hand, it was incumbent on the respondent's disciplinary committee to observe the said guidelines. We say so because in the light of what transpired 20

in the case at hand, it cannot be safely vouched that the appellants were given opportunity to be fully heard before being condemned. The right to be heard before adverse action or decision is taken against a party is so basic that a decision which is arrived at in violation of it will be nullified even if the same decision would have been reached had the party been heard. This is so because the violation is considered to be a breach of natural justice. See- abbas s h e r a lly & a n o t h e r v s . a b d u l S. H. M. FAZALBOY, Civil Application No. 33 of 2002 (unreported). Thus, the failure to accord the appellants an opportunity to be fully heard was a breach of natural justice and a violation of a fundamental right to be heard under Article 13 (6) (a) of the Constitution of the United Republic of Tanzania, 1977 (the Constitution) which provides: W akati haki na wajibu wa mtu yeyote vinahitaji kufanyiwa uam uzi wa Mahakama au chombo kinginecho kunachohusika, basi mtu huyo atakuwa na haki ya kupewa fursa ya kusikiiizw a kwa ukam iiifu..."

See- MBEYA RUKWA AUTO PARTS AND TRANSPORT LIMITED vs. JESTINA GEORGE mwakyoma, Civil Appeal No. 45 of 2000 and m ire ARTAN ISMAIL AND ANOTHER VS SOFIA NJATI, Civil Appeal No 75 of 2008 (both unreported) and selcom gam ing lim it e d v s gam ing MANAGEMENT (T) AND GAMING BOARD OF TANZANIA [2006] T.L.R 200 . In view of what we have endeavoured to discuss, we are satisfied that the termination of employment of the appellants was unfair as correctly found by the CMA on account of denial of the right to be heard on the part of the appellants. As to the finding by the learned Judge of the High Court that, the CMA award was illegal and improperly procured, this was not justified as it is not backed by the evidence on the record. However, we do not agree that it was based on extraneous factors because the issues of gross negligence fared right from the initial stages when the charge was laid against the appellants; during the proceedings before the disciplinary committee and before the CMA. In this regard, we are satisfied that, the termination of the appellants was not valid on account of being condemned without being 22

heard and as such it was unprocedural and unfair as rightly found by the CMA. We thus allow the appeal, reverse the decision of the High Court and order the respondent to pay the appellants remuneration or terminal benefits in compliance with CMA's award. This being a labour matter, we make no order as to costs. DATED at DODOMA this 18th day of June, 2020. S. E. A. MUGASHA JUSTICE OF APPEAL G. A. M. NDIKA JUSTICE APPEAL M. C. LEVIRA JUSTICE OF APPEAL The Judgment delivered on 19th day of June, 2020 in the presence of Mr. Elias Machibya & Magreth Mbasha, learned counsel for the Appellants and Mr. Ayoub Mganda, learned Principal Officer for the Respondent, is hereby certified as a true copy of the original.